The problem is 90% are junk and are not worth the money.
This article is about choosing a FOREX Trading system with the potential to make big gains.
Let's look at some things that you need to consider:
1. Never pick a day trading system!
FOREX day trading systems are very popular, but they simply don't work and the logic is totally stupid.
Why?
Because all short term volatility is random and therefore you can't trade it.
If you don't believe the above, then ask for a real time track record of profits and you won't get one.
2. Pick a simple system
It's a fact that simple systems work better than complicated ones as they are more robust in the face of brutal market conditions.
There is no correlation between how complicated a system is and how much money it makes.
Simple systems are also easier to understand and this makes them easier to follow through inevitable losing periods.
3. Make sure the logic is revealed
Never buy a black box system where you don't know how it works.
The reason for this is like in point 2, if you don't understand it, you won't be able to follow it through losing periods with discipline.
4. Beware of optimization
Never consider a system that uses different parameters to trade different currencies.
The logic should work on all currencies or not at all.
Many vendors simply tweak the parameters to curve fit the data to make a profit.
This is similar to shooting at a target and drawing bulls eyes around every shot afterwards.
5. Track record
Ideally you want a track record that is real time and has made real dollars for the vendor.
Be wary of hypothetical track records which of course are done in hindsight, knowing the closing prices.
Anyone can make a profit this way!
Look for a track record of 2 years or more, that is real ie has been traded live without the benefit of hinsight - Either with money or done in a simulated fashion but audited by an independent ratings agency.
6. Study the peak to valley drawdown
Look at the worst drawdown on the track record and its time to recovery and decide if you are comfortable with it.
Always assume your worst drawdown is ahead of you.
Some traders can take drawdowns of 50% or more others can't, so get one your comfortable with.
7. Support and money back guarantee
Reputable vendors will give you good support and will normally provide a money back guarantee, as they have confidence in their product.
Do some research on the vendor and never buy a FOREX trading system without a guarantee.
Finally
There is no free lunch with forex trading systems so use common sense when buying one.
The above tips will help you pick one of the small percentage that make big gains.
Doing the above research will save you from potential losses and could see you make some great profits.
